From Craig Newmark’s blog, Gavin Newsom is introducing social media to San Francisco civics, and creating a Zappos-like Twitter channel @SF311 to support non-emergency city nuisances like potholes and trash.

RecoverySF.org is set up for citizens to discuss the local issues related to the American Recovery & Reinvestment Act (ARRA) passed by Congress, also known as the Stimulus Plan. It’s positioned as a bulletin board to solicit citizen opinion.

@SF311 is simply representative of the Twitter feed that we believe will soon replace telephone support for local community services. It’s a great example of using Twitter for asynchronous / real time support and a testament to the utility of Cotweet, an enterprise application that allows multiple city support personnel to reply to requests into @SF311.

Gavin Newsom is taking a page from Barack’s playbook in adopting new social media ideas that could eventually build him a following for his run for California governor.

The Denver Post is conducting a poll to its readers – would you pay to access news online?

The Denver Post already plans to start charging for content. Would the overwhelming results of this informal reader poll change their mind? It boils down to, how stupid are they?

This is a followup from yesterday’s article about news feed aggregation – the advent of  “real time” news in the past year with Twitter and micro-blogging citizen journalism has commoditized news content. The public realizes they can find their news anywhere and everywhere online… this perception didn’t exist a year ago.

President Obama staged an 80-minute interactive town hall meeting this morning at 11:30 EDT. In the span of an hour or so, he received 92,000 questions online, from which 3.6 million votes were cast voting up/down those questions.

Idea: his administration should create a “White House Connect” application based on a white label Google Friend or Facebook Connect type system. White House Connect could be set up as a governmental social network, that could be extended on national, state and local levels.

Benefits of an Obama Induced Online Society

President Obama has the opportunity to push American society online, with the following benefits to his wired administration:

1. Easier to broadcast messages to a tech savvy media and public, constituents who likely comprise a hotbed of Obama supporters.
2. Engages the public and gives them a feeling of connectedness with his administration.
3. Positions Obama as a populist president using a variety of media, from Jay Leno, to the internet, to communicate his messages as a “real” person, not somebody isolated in an inner sanctum.

In a similar vein, the South Korean government pushed its citizens after the 1998 Asian Financial Crisis to adopt broadband and the Internet, and became a global Internet powerhouse.

Having a social media presence attracts opportunities. Twitter in particular has introduced me to many people with common, shared business interests – they come out of the blue and we become close friends very quickly based on our business compatibility. Many “social media experts” promote consulting, or how to get rich quick schemes based on social media. I’m surprised to see very few leverage their experience and their social media influence to develop businesses not based on social media advice.

So… I’ve started a Mortgage and Refinance services business. I’ve been involved in the real estate industry for over 6 years as an entrepreneur, business owner and consultant. For the past 2 1/2 years, I’ve authored the Transparent Real Estate blog, and chronicled how the real estate industry should adopt the social media and make the business of real estate less murky and more transparent.

I have five reasons for starting a mortgage business:

1. Make the mortgage and refi procurement process completely transparent. I have always professed that finding and closing on a mortgage should be as transparent as buying any off the shelf product with a fixed price tag. Most consumers have no clue about the various fees (some are junk fees like “doc prep”), even hidden fees that have given the mortgage industry a somewhat treacherous reputation.
2. Provide professional, experienced service. The barriers to entry to become licensed as a mortgage broker or loan officer are fairly low, and timely service is sometimes lacking. Frankly, it’s not that simple to get a loan in this recession, and that’s where expertise and service becomes the key satisfaction determinant.
3. Create a new sales and marketing paradigm. Leveraging the lessons of 2.0, we will strive to educate the consumer about the mortgage procurement process. And we won’t contact the consumer unless they ask us to. We won’t have an email marketing campaign or aggressively spam in any way. We’ll endeavor to change the hard sell culture.
4. Launch of a revolutionary Wholesale Mortgage Rate Engine. Almost all consumers don’t realize there are wholesale loan rates. Through consulting, we advised on the development of RateWindow, a revolutionary Wholesale Mortgage Rate Engine that launched this month. Finally every rate can be fully disclosed to the consumer. We wholeheartedly base our quote system on RateWindow; standard quote engines like Bankrate and Lending Tree don’t provide wholesale quotes and sell your contact info as leads to anybody who wants to buy them.
5. Help consumers purchase a home. I believe the next 24 months will be the best opportunity to purchase a home in America because this recession will eventually bottom out.

If you are researching mortgages and refis, please visit our Wholesale Mortgage Rate Engine at http://mortgagetransparent.com/ratewindow.

Mark Cuban proposes his contribution to the Stimulus Plan by allowing entrepreneurs to post “business plans” as comments to his article Open Source Funding. His criteria in a nutshell – business plans are posted for all to see, comment, and steal if they want. Mark sends a non-negotiable contract for funding.

I’m glad Mark is using his media fame to push this financing model into the mainstream.

Stealth is no longer an efficient way to build a business model. In stealth, the world can’t provide feedback for the countless iterations required to fine tune any business model – funding, marketing, product development. In both my blogs Media Transparent and Transparent Real Estate, I propose new business models and strategies up front for feedback. This action does three things: 1) Like an academic publication, it brands the idea, 2) It provides feedback for iterative improvements, and 3) It attracts like minded thinkers who might be partners or supporters of the initiative.

Open source funding is the most efficient way to develop a business model because the most qualified entrepreneurs with the appropriate domain expertise will “rise to the top”. As Mark says:

If it’s a good idea and worth funding, we want it replicated elsewhere. The idea is not just to help you, but to figure out how to help the economy through hard work and ingenuity. If you come up with the idea and get funding, you have a head start. If you execute better than others, you could possibly make money at it.

I agree that in aggregation, the most efficient and productive business models (combined with the hard work) will create economic opportunities. That’s why stealth startups run by 24-year-olds based on an idea won’t work; their lack of domain expertise won’t ever get them funded for anything in an open source world. VCs can be just as guilty… they use stealth to keep ideas hidden among themselves so they may leverage negotiation power over entrepreneurs.

This transparency of business models should be extended across industry disciplines. Last summer, I created the Management Consulting 2.0 slideshow explaining our philosophy that consulting should be open source, not a closed book of research done behind McKinsey doors that can be charged out at $750/hour.

Happy New Year!

1) 2008 Crushed the Old Media, 2009 will see New Business Models

Two blog posts describe the destruction:

From Editor & Publisher 12/30/08: No Bull: 2008 — The Year Newspaper Stocks Collapsed (h/t Inquisitr )

The statistics behind the collapse of newspaper stocks in 2008 are sobering as New Year’s Eve approaches:

GateHouse, down 99.55% in this calendar year
McClatchy, down 93.6%
Lee Enterprises, down 97.3%
Journal Register Co., down 99.58%
Media General, down 92.47%
Gannett, down 80%

Oddly, the winner in the sector is the company being beat up the most in the financial press, The New York Times Co. (NYSE: NYT). Times stock is down 59% this year.

From Six Pixels of Separation 12/30/08: Mass Media – Mass Destruction – analyzing the recent poignant admissions of capitulation by mainstream media

The Rise of New Business Models?

Frankly, predicting new business models within the media industry is difficult with its complex web of content distribution relationships spanning theaters, international distribution, cable and satellite distribution. However, with the success of industry ratified models like Hulu and the sense of inevitability that content is destined towards freedom, 2009′s recession will force new media models into play because the old models aren’t working any more.

Business Week’s Steven Wildstrom notes that consumers can’t find many great old movies on DVD or online in this era of the long tail retailing.

The battle is between an industry that wants to tightly control who gets to see what when and customers who want to watch what they want wherever and whenever. This clash is slowly being resolved in favor of consumers. Movies are becoming available for download and on DVD more quickly after theatrical release. Director Steven Soderbergh has a deal with Mark Cuban’s Landmark Theatres and HDNet that allows some of his movies to be released on disk and online the same day they show up in theaters. I expect more movies to be launched this way.

The day you can choose to see a new movie in a theater, on your TV, on your laptop, or on your iPhone is still some time off, but it is coming.

2) Retail Crashes in 2009; Consumers Will Demand Online Presence

Consumers demand online presence for retailers, travel, cars, real estate… everything. Those who aren’t providing that presence (note Sears.com) are being dragged down by a low margin / high leverage bricks and mortar business model.

From CNN/Money 12/31/08: Thousands of Stores to Disappear in 2009. The recession will place a premium on new online business models that enhance profitability and scale more flexibly than physical retail systems (shipping by UPS is more scalable and profitable than the logistics of retail distribution and warehousing).

3) In Particular, Consumers Will Demand Corporate Social Media Presence

Zappos has proven that instituting multiple pathways for corporate communication and support, such as Web 2.0 apps like Twitter, is fueling its growth:

Zappos seems to have married the best of all these worlds: It has “excellent shipping options and also excellent customer support – online and on the phone. They often upgrade you to faster free shipping and are easily available to answer questions or complete returns.”

The key execution concept here is to move customer support into the frontline using real time online (and offline) applications, and not hide them behind a frustrating phone-tree ridden call center. Then give the support crew identities (435 Zappos employees have Twitter accounts ) so they can own their service quality and receive credit for building their online reputations. One company stands out to provide this kind of online third party customer support – GetSatisfaction.com. More will show up, I’m surprised the 24×7 overseas call center operations haven’t picked up on this.

4) The 2009 Recession will Elevate Social Media Marketing as a Corporate Cost Control Measure

Brand advertising has generally employed one-way messaging to consumers who typically respond to brand commercials as agenda-laden, or even spam. That’s why Tivo fast forwarding of ads is a value proposition. Brand advertising developed in the 1950′s with Madison Avenue’s recognition of the power of the new visual media to branding. It worked because broadcast TV was, at the time, the most optimal means to distribute the message.

Brand advertising is expensive because it employs the vertical professional services of advertising agencies – creative, research and production – to develop “campaigns”, and ad budgets for mass market placement. Social media in part threatens to disintermediate advertising professionals by leveraging “crowdsourcing” to test marketing and advertising concepts more quickly and cheaply.

From Umair Haque The Shrinking Advantage of Brands

But cheap interaction (pk: via the social media) turns the tables. The cheaper interaction gets, the more connected consumers can talk to each other – and the less time they have to spend listening to the often empty promises of firms.

In fact, when interaction is cheap, the very economic rationale for orthodox brands actually begins to implode: information about expected costs and benefits doesn’t have to be compressed into logos, slogans, ad-spots or column-inches – instead, consumers can debate and discuss expected costs and benefits in incredibly rich detail.

Corporations will begin to see that achieving good reviews and referrals from social grading systems like epinions, Facebook or Yelp are more effective and less costly marketing vehicles than ad campaigns.

5)  Consumers Won’t Buy Based on Week-Old News

Just as the internet has made the morning newspaper a digest of old news, Twitter and other micro-blogging applications are changing news digestion through minute-by-minute citizen broadcasting of breaking news and events. This amplification of news content is not data overload because the news is filtered by the user/reader who view through feedreaders, sites embedding RSS feeds, and special search criteria. Sites that track transactional data and news in real time – Marketwatch.com for stocks, Google Blogsearch for updated blog commentary, Search.Twitter for Twitter commentary – will be in demand.  Who is willing to purchase GM stock without checking the news? Who will buy a home during this period of economic instability based on month old National Association of Realtor reports? Real time reporting, done most efficiently by citizens (some with professional motivation like real estate agents), will provide value to consumers.

6) The Focus of News Will be Distribution over Creation

Before the Internet and citizen journalism, mainstream media owned the content it created (news, music and movies) and charged a lot for the consumption of that content. The social media now produces a lot of the online content and is disrupting the media industries by pushing the price for content consumption towards zero. Online news sources are now positioning themselves to be the most comprehansive “news re-sources” and in 2009 will start steering their readership to authoritative sources who generally will not be their own journalists. Well known respected bloggers and Twitterers will benefit from the exposure.

7) Discovery is the Killer App

Yelp on iPhone does it well. Go to any unknown city, and Yelp uses the iPhone GPS to find a well reviewed restaurant or nearest gas stand within seconds. The best new applicatons of 2009 will create discovery opportunities. Discovery is best facilitated by: 1) referrals from a social network, and 2) breaking news of actionable content, 3) new contextual search capabilities that deliver higher relevancy results than a typical search engine.

The ideal discovery app is an online clearinghouse system that leverages the aggregate social media to broadcast needs and wants. For example, when I want to sell my car, I would want to broadcast this fact once (on say Facebook) and have it distributed across numerous social networks matching “want to buy a car” queries, in particular those within a 30-mile radius. The match would track degrees of separation, similar to how LinkedIn connects two unrelated people with synergetic interests, and provide relevant and viable social connections between two parties.

8 ) The Question: “How does Facebook Help My Business?” is Finally Answered.

Facebook Connect, and its social network cousins Google Friend Connect, and the still obscure MySpace ID will facilitate the portability of social networks, or the “social graph”. This will be one of the most powerful applications towards creating a social media business model in 2009, but is hard to explain to social media newbies. What does it mean?

Through Facebook Connect, consumers log into other sites using their Facebook login details. Once inside the site, users can discuss or post their activities in real time to their Facebook network. The effect is to bring in their network of friends into the hosting site. For example, a teenage girl may visit a Facebook Connect – enabled retail fashion site like Forever 21, buy an awesome sweater at a deep discount sale price, and broadcast this fact to her large Facebook network. A few of her Facebook friends do the same thing, and by extension, you can imagine the instant viral marketing power of each new succeeding Facebook network put “into play” for a good sweater deal.

9) Social Capital is the New SEO

Developing a strong online reputation that the social media can point to is far more credible than a search engine referral. In fact, the more social capital one owns, the better the search rank anyway.

What is Social Capital? In most practical terms, it’s the measure of how powerful your social network is in referring business to you. As any social networking strategist will tell you, the best way to build social capital is to “link” and develop relationships with the social “hubs” – people that are also well connected.

Twinfluence, a Twitter analytics application, demonstrates how powerful Twitter’s reach can be:

• Reach is measured as the sum of the number of followers plus the number of second degree followers.
• Social capital is calculated by dividing the reach (6,960,480) by the # of followers (7,325), which estimates that each follower averages 915 followers themselves.

Twitter is a highly viral application that builds social capital quickly because Tweets are distributed and shared frequently, even up to the minute, compared to other media. Most Twitterers can confirm how often top Twitterer names like Guy Kawasaki appear because their second degree followers are conversing with or referring to Guy.

Quibblers will say what’s the use of 7,000,000 strangers within reach? Answer – this is ubiquitous consistent viral branding built on the same principles of 1950′s Madison Avenue – brand advertising simply makes you well known and easy to recall when potential clients have the need you can fulfill. Even better, Twitter’s branding provides a Web 2.0 social system of reputation management that unlike brand advertising, allows clients to confirm credibility.

10) The Ascendancy of the Social Media while Blogging Takes a Back Seat

Blogging used to be about creating content. Today’s mainstream blogs are about distributing content. The “blogs” now garnering much of the traffic – Huffington Post, Engadget, etc. – have become mass media digests.

It’s the portability of content that now matters. Online presence can be measured by where and how often your name and word show up across the Internet. The more entities distributing, reblogging and retweeting your content (including mass media publishers who use blog syndication services like Blogburst and Newstex), and the more services chronicling your activity/content (Friendfeed, Facebook, Flickr, Twitter, etc.) the more renowned you become. And that can lead directly to celebrity, position, or just a business break.

The blog is not dead, it still remains the foundation for commentary and expression. It is now a component of a more comprehensive social media strategy.

11) The Social Media and Cloud Collaboration Team Up to Create “Everyman” Applications

We all know ideas, business plans and startups ferment around water coolers. The leaders and hubs of the social media comprise a new virtual water cooler. 2008′s explosion of Twitter and Facebook API based applications demonstrate the ease of application development. Non-programmers can now develop low cost applications, and the social media water cooler will be instrumental in driving the ideas that build new businesses.

For example, Domus Consulting and a group of Bay Area real estate bloggers built Homescopes.com, a real estate marketing website devoted to breaking housing market news in Northern California, and are expanding its presence to 100 bloggers. Domus is helping other agent groups and brokerages to develop their own Homescopes-like properties, which can potentially develop into viable online assets.

The collaboration of geographically separated participants into a new venture or business is made easier by social networking and cloud collaboration tools. 2009 will bring in a wave of new “Everyman” applications.

12) If you liked this post, check out how these trends apply to a specific vertical – real estate – @ 10 Leading Trends in Real Estate for 2009 at Transparent Real Estate.

Tonight on CNN, David Gergen mentions that public perception turned against the Big Three auto bailout when “bloggers” feasted on the Big Three’s executives arriving to the November 19 Senate hearings in corporate jets (“going to the soup kitchen in tuxedoes“). Now they’re driving their hybrids to tomorrow’s hearings, but the gesture smacks of an insincere attempt at appeasement.

I like the way Gergen, who used to be Clinton’s press secretary, addresses “bloggers” as a unique media group, and how he gives them credit for influencing and setting the political tone around this tragic debate.

The press is illuminating the fact that there is a profitable car industry in America, it’s just not in Michigan (read the article). CNN claims tonight that the Senate doesn’t have the votes for passing the auto bailout. So the final option may be just to move the car industry south:

There’s no natural law that America must have a Detroit automotive industry, any more than steel had to be made for all time in Bethlehem, Pennsylvania or textiles in New England. Britain sold off all its car plants to foreigners and was no less an advanced economy as a result, though it was a healthier one. Detroit may yet adjust to avoid destruction in the best spirit of American capitalism. The other American car industry is a model for how to do it.

YouTube has huge media advantages over mainstream media:

1. It’s free. Buying airtime is way expensive.
2. It has global reach. Airtime only reaches a regional broadcast area.
3. It’s viral. Anybody can embed YouTube messages like I’ve done.

It’s time to call YouTube the uber-network, it transcends TV and cable. Barack Obama has endorsed it for his weekly addresses to the people:

The auto industry, care of GM’s PR group, has also made its plea on YouTube:

Note that Barack and GM have followed the “sound bite” rule – 4 minutes tops to keep our peripatetic consumer focus.

Final thought: Advertising can be served up free on YouTube and other online video services, and people can comment on them freely. Multimillion dollar national TV ad campaigns become budget-challenged in this economy, and ad agencies start looking like candidates for disintermediation.

The bumbling ex-banker and Treasury Secretary Henry Paulson sure needs a few PR lessons:

Is it any wonder we’re skeptical that the bankers will take all those billions and use them for the common good?

A classic “greedy bankers” WAMU commercial